India's green hydrogen industry is entering a critical phase in which project allocations and production targets must translate into financial closure, construction and commercial commissioning. Developers and energy companies are now confronting challenges around firm offtake commitments, financing, technology integration and infrastructure, even as government incentives support the development of production capacity.
From Allocation To Execution
Speaking at the Horizons Clean Energy Expansion India Conference 2026, DMR Panda, Executive Director, NTPC, said the company was assessing the risks involved in moving from pilot projects to larger hydrogen developments.
The shift from announcements to execution comes as the government expands support for green hydrogen production and its derivatives. Under the National Green Hydrogen Mission, 18 companies have been awarded a cumulative 862,000 tonnes per annum of green hydrogen production capacity, while the Solar Energy Corporation of India has discovered prices for the supply of 724,000 tonnes per annum of green ammonia to 13 fertiliser units.
However, capacity allocations do not automatically translate into operating plants. Developers must still secure long-term buyers, arrange financing, establish renewable power and water infrastructure, and ensure that electrolyser and downstream equipment can operate reliably at commercial scale.
The gap between announced projects and actual execution is emerging as a central concern for the global hydrogen industry. According to a report by S&P Global Energy, the global pipeline included approximately 25 GW of committed electrolyser capacity. More than 100 GW remained at the pre-final investment decision stage, including projects in advanced development, permitting and design.
Despite the expansion of the pre-FID pipeline, capacity that has reached construction, financing or commissioning has not grown at the same pace. Developers continue to face difficulties in taking projects from planning to investment and execution.
The issue is relevant to India, where the government has introduced production incentives and demand-aggregation mechanisms to support the sector. S&P Global Energy has also identified the movement of projects towards final investment decisions and construction as a key focus for the country's hydrogen industry.
Panda said NTPC's board recognised that hydrogen projects involved uncertainties, particularly because many of the company's initiatives were first-of-a-kind developments. NTPC is exploring different applications, including mobility, hydrogen blending and microgrid-related projects. According to Panda, the experience gained through smaller pilots would be important in anticipating the risks involved in larger facilities.
NTPC is also examining integrated project models. Panda described an approach involving a power plant, a hydrogen hub, carbon dioxide capture and methanol production, with treated sewage water being transported from a nearby city for use in the project.
Bankable Projects, Firm Buyers
For developers, the central challenge is to establish demand that can support investment decisions. Prasant Choubey, President & Head of Green Hydrogen, Green Ammonia, Avaada, said the immediate opportunity lay in replacing fossil-based hydrogen in industries that already consume it, rather than relying only on the creation of new demand.
Choubey pointed to sectors such as fertilisers, refineries and steel, where hydrogen and its derivatives could support industrial decarbonisation. Green ammonia could also provide a route into both domestic industrial consumption and export markets.
Choubey said developers should focus on the bankability of projects rather than competing only on the lowest production price."The question is not of discovering the lowest prices… The question is about offering the bankable project and going for the bankable prices," he said.
A bankable project requires more than a competitive production cost. It also needs a credible buyer, a defined delivery structure, access to infrastructure and sufficient confidence among lenders that the project can generate predictable cash flows.
Offtake And Financing Constraints
Anil Kumar, CEO, Green Hydrogen & Ammonia, ACME Group, said ACME's experience showed how the sector's early-stage status had affected both financing and equipment procurement. The company began working in the sector in 2020 and subsequently developed pilot projects to build experience in renewable energy integration, hydrogen production and equipment compatibility.
Kumar said that financial institutions and suppliers initially lacked confidence in the technology and the commercial prospects of the industry. "Unless you have a firm commitment from the buyers, it is very difficult to go for the production of these types of facilities," Kumar said.
The need for buyer commitments has become even more significant with the increase in project sizes. Developers seeking to build large green ammonia or green methanol facilities must demonstrate that the output will have a market before committing substantial capital to production assets and associated infrastructure.
Building The Supply Chain
The availability of equipment and supporting infrastructure remains another factor affecting the speed of project execution. Kumar said suppliers were initially cautious about developing products for the green hydrogen sector, requiring developers to work with manufacturers on technology adaptation and research.
The evolution of equipment and the growing participation of technology companies point to a maturing ecosystem. However,a reliable supply chain remains essential for projects that depend on electrolysers, renewable power systems, storage, transport and downstream conversion technologies.
For India, the next stage of green hydrogen development will therefore depend on whether project allocations can be converted into projects that reach financial closure and construction. Firm offtake agreements, integrated infrastructure, and greater confidence among lenders and suppliers will be necessary for announced capacity to progress towards commercial commissioning.